West Virginia State Life Insurance Practice Exam

If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds directed under the Uniform Simultaneous Death Act?

1. Insured's estate

2. Insured's contingent beneficiary

3. Primary beneficiary's estate

4. Insurer retains the proceeds

The correct answer is: Insured's contingent beneficiary

The Uniform Simultaneous Death Act provides a clear guideline for situations where the insured and the primary beneficiary die simultaneously, and it's impossible to determine the order of death. In such cases, the law typically directs the death proceeds to be distributed as if the primary beneficiary had died before the insured. This legal approach helps to ensure that the intent of the policyholder is honored, which is generally to provide financial support to beneficiaries. If the primary beneficiary is assumed to have died first, the proceeds would then go to the contingent beneficiary, if one exists, rather than the primary beneficiary's estate. This avoids complications and potential disputes regarding the deceased beneficiary's estate and ensures that the intended parties receive the benefits according to the policy design. Thus, selecting the insured's contingent beneficiary as the recipient under these circumstances aligns with the principles outlined in the Uniform Simultaneous Death Act.